Consumers remain wary of attempts to manipulate energy markets, but it can be hard for consumers to tell when markets are being manipulated. For example, JP Morgan has been accused of manipulating the California ISO power market, but the company denies the accusation. The markets are complicated, the regulatory filings in the complaint are less than transparent to non-specialists and not always public, and the disputes can go without final resolution for years.
So much easier for consumers when public officials get involved in market manipulation, because they can be counted on to brag about the manipulation and word gets out. For example, in New Jersey, as the Star-Ledger reports, Gov. Christie held a news conference to publicize his energy market manipulation efforts:
Yesterday, Gov. Chris Christie signed a law to revive the [state’s solar power] industry, which ranks only behind California’s in terms of total solar-energy projects.
The market works because electric companies must buy solar credits, called SRECs, from panel owners on a state-planned market, or produce their own.
But the subsidy plus a federal incentive led to a huge buildup of projects in the state and a glut of SRECs. That drove prices down sharply, leading to fears of solar layoffs.
So legislators and the governor stepped in to dramatically increase the number of solar credits that New Jersey’s electric utilities must buy, a move meant to increase prices.
See also the Renewable+Law blog, “Bill to stabilize New Jersey Solar Market Signed into Law.”
It is clear from these descriptions that politicians, working with industry insiders, are working the rules in order to push market prices up. Smells like manipulation to me.